by Franz Lidz

If HBO isn’t in bed with Oscar De La Hoya, then on this particular May evening, they’re at least doing some pretty heavy petting. The premium cable channel, long the reigning champion of boxing telecasts, has reportedly shelled out some $10 million in marketing, production, and licensing fees to showcase the so-called Golden Boy as he faces journeyman Stevie “Two Pound” Forbes, an 18-to-1 underdog, before 27,000 fans in Carson, California. De La Hoya will be paid more than $10 million for his time between the ropes, but he’s promoting the event through his company, Golden Boy Promotions, so he’ll also get a juicy cut of ticket sales.

Since turning his attention to the business of boxing, De La Hoya has become a major player in a sport long dominated by two impresarios, Bob Arum and Don King, both of whom are 77. He’s trying to overhaul the sport at a time when the heavyweight division, typically the most popular, is in steep decline—the three current titleholders, each crowned by separate sanctioning bodies, might as well be invisible—and when boxing as a whole is getting clobbered by the rising popularity of Ultimate Fighting. Golden Boy had a stake in 95 percent of boxing’s total pay-per-view volume in the United States last year, up from 65 percent in 2006. With De La Hoya’s stable of 50 fighters—many of them aging but still capable headliners—he has become the preeminent provider of fights, especially for Hispanic audiences (one of the sport’s few growth markets). His outfit delivered 50 shows in 2007, including many programs for the HBO Ole channel and the Solo Boxeo series for Spanish-language network TeleFutura, as well as features for regular HBO.

De La Hoya says he’s proud of Golden Boy not so much for its profit potential—prizefighting is a notoriously low-margin business—as for its potential to reform boxing from the inside. “Traditionally, fighters have had no idea how much money promoters make off them,” he says. “But we’re up-front with guys. Our books are open. We break down every source of revenue so they can see every cent.” Eventually he hopes, somewhat ambitiously, to offer pensions, health insurance, and financial planning to his fighters. He also hopes to attract enough corporate sponsors to put boxing back on network TV, which deserted the sport in the early 1980s. “We treat boxing like a legitimate business, bringing in integrity, honesty, and transparency,” he says. “We treat fighters like normal human beings. We’re a company for the fans, for the people.”

Competing promoters tend to snicker at such lofty pronouncements, and they claim that De La Hoya’s status as boxing’s last remaining matinee idol means Golden Boy gets preferential treatment from HBO—a claim he doesn’t exactly refute. “Oscar appointed himself the moral guardian of boxing and then lumped the rest of us promoters together in a different boat, like we’re all crooks,” gripes Dan Goossen of Goossen Tutor, a fight promoter in California. “He’s talked a lot about introducing ethical and honorable business methods, but during his seven years as a promoter he hasn’t changed a thing. I don’t see Golden Boy saving boxing: I see it succeeding by any means it can.”

If anything, the fight in May shows what De La Hoya is up against in trying to attract fans to a sport many perceive as shady and, worse, boring. From the opening bell, De La Hoya seems like a battered memory of the electrifying fighter who won an Olympic gold medal and world championships in six weight classes. He looks logy and tentative and all of his 35 years. Still, the HBO commentators sprinkle on superlatives like waiters with pepper mills: De La Hoya is “throwing sensational combinations” and “fighting the perfect fight” and, most implausibly, “looking like he used to look 10 years ago.”

The Golden Boy gets a unanimous win that is never in doubt (one judge has him winning all 12 rounds), but the dullness of the bout is reflected in dismal viewership. In the history of HBO, no fight so heavily hyped by the network has ever earned lower ratings. HBO Sports president Ross Greenburg insists the $10 million investment was worth the risk, even if the show was merely a loss leader for other programming. HBO, he says, was bowing to the demands of the marketplace, which is increasingly controlled by De La Hoya. Indeed, HBO has signed a four-year deal with him guaranteeing that it will buy a specific number of fights for a specific number of dates. No other promoter has such an arrangement.

De La Hoya had talked of retiring from fighting this month to focus on business full time, but he recently started waffling. His final bout was initially planned as a rematch of his loss in 2007 on pay-per-view to the preposterously gifted and outrageously self-centered Floyd “Pretty Boy” Mayweather. A five-month marketing campaign and an HBO reality series helped make that fight the most lucrative event in the history of pay TV. Not only did De La Hoya personally pocket a minimum of $25 million (and Mayweather, $10 million) for a night’s work, but Golden Boy Promotions enjoyed a hefty share of ticket sales ($18.4 million) and pay-per-view sales ($147 million). De La Hoya’s total take was in excess of $50 million.

As excitement built for a rematch this month, Mayweather stunned the boxing world by announcing his retirement, so De La Hoya will instead fight Manny Pacquiao, the World Boxing Council lightweight champ and a less magnetic presence. The boxers will meet at the welterweight limit of 147 pounds, a weight De La Hoya has not fought at since 2001. Pacquiao has never fought above 135 pounds. No one expects pay-per-view sales to set rec­ords, or even come close.

Because De La Hoya as a fighter has a huge impact on the success of De La Hoya as a promoter—particularly when it comes to his arrangement with HBO—he now says he has three or four more fights in him. Regardless of how much longer he competes, some see the Pacquiao matchup as a portent of boxing’s future: De La Hoya and HBO arm in arm, setting up lackluster bouts that further sour the public on the sweet science. “Before long, Oscar will have all the fighters and all the dates, and nobody is going to watch boxing anymore because the quality is so bad,” says Kathy Duva of Main Events, which has nurtured 19 world champs during the past 30 years. “Golden Boy Promotions will be the death of the sport. Basically, it’s the Wal-Mart of boxing.”

A brilliant midsummer sun blooms over the Ritz-Carlton in San Juan, Puerto Rico. Valets sweep up the parking lot. Desk clerks bring bottled water to lounging guests. When De La Hoya pulls his BMW in front of the hotel, he is quickly recognized. A gaggle of employees drifts over from the lobby and surrounds him. De La Hoya gives a wry smile. He is unfailingly friendly, charming, even kind to these working stiffs. “Usted es uno nuestros los propios,” says a waiter. You are one of our own.

De La Hoya’s business is based in Los Angeles, but he spends about seven months a year in San Juan. Settling there was the idea of his wife, the Puerto Rican chanteuse Millie Corretjer. Before they were married, De La Hoya told her, “My home is in California, my business is in California, my training camp is in California. It only make sense that we live in California.” Millie smiled sweetly and said, “Oscar, we’ll live in Puerto Rico.”

Before his courtship of Corretjer, De La Hoya fathered three children by three other women. Last year, photos surfaced showing him in a wig, high heels, and a fishnet bodysuit. They were taken by an ex-stripper, who later recanted her claim of the photos’ authenticity but sued De La Hoya for slander (and $25 million). This summer, she withdrew her claim; De La Hoya’s attorney insists the woman had been paid no hush money. “Yes, I was unfaithful to my wife,” the fighter says. “The photos that woman took were doctored and, thank God, the truth eventually came out. I created a lot of pain for Millie, but we worked things out through a family therapist, and now we’re happier than ever. I haven’t been this happy since I was a boy.”

The middle child of Mexican immigrants, De La Hoya was raised in a one-bedroom house in the barrio of East Los Angeles. His father dug graves, and the family often didn’t have money for food. He was six when he fought his first amateur bout, and 10 when he started training at the Resurrection Boy’s Club Gym, a former church. By the time he graduated from high school, he had become a national Junior Olympic champion, amassing 223 wins and only five defeats. De La Hoya entered the national spotlight in 1992 at the Barcelona Olympics, where he was the only U.S. fighter to win a gold medal. He became the darling of NBC’s Olympics coverage and celebrated the triumph by parading around the ring with Old Glory in his right hand and the colors of Mexico in his left, in tribute, he later said, to his home and his heritage. After dedicating the medal to his mother—who had died of cancer two years before—he became known as the Golden Boy.

A murderous left hook was perhaps the least of De La Hoya’s assets. He was articulate, good-looking, and bilingual. A couple of local agents signed the 19-year-old to a $1 million management contract, then the richest deal ever for an Olympic boxer. In his professional debut, he sold out L.A.’s 6,000-seat Great Western Forum, punching his opponent hollow in less than two minutes. But the contract turned out to be worth quite a bit less than $1 million. The promised “$250,000 home” turned out to be a rental house; and the Acura NSX sports car, on lease. “All I saw from the deal was about $75,000 in cash,” says De La Hoya, who subsequently fired the agents and hooked up with Bob Arum.

Ever since the days of bare-knuckle brawling, boxing promotion has been riddled with corruption, from lax contract enforcement to extortion to fixed bouts. Fighters, denied the protections afforded to athletes engaged in less perilous pastimes, depend on the benevolence of promoters and managers. “When problems crop up, there’s no commissioner to step in and decide what’s in the best interests of the sport,” says Seth Abraham, president of HBO Sports from 1975 to 2000. “In boxing, it’s everyone for himself.”

Or as Don King, the impresario known for his showmanship and ruthless opportunism, puts it in an interview, “Boxing is the last vestige of capitalism. It’s Adam Smith. It’s free enterprise. It’s The Wealth of Nations. It’s political economy. It’s supply and demand. It’s the invisible hand.” (When it comes to nonstop nonsense or dodgy dealings, no promoter is in a class with King, a onetime numbers runner who has been convicted of manslaughter and acquitted of tax evasion and fraud.)

Jay Larkin, the former executive producer of Showtime Boxing, says network television abandoned the sport partly because programming executives got fed up with buccaneer promoters who routinely gouged purses, doctored ring records, and used bait-and-switch tactics with fighters. “The execs would buy A versus B and then watch helplessly when X versus Y showed up,” says Larkin. “Major media companies could not operate on that level of street bargaining. The fight business is like a bag of snakes. You throw it in the corner, and it changes its position.”

Of all the public utterances credited to Arum, the most enduring is this: “Yesterday I was lying, today I’m telling the truth.” A tenacious Brooklyn native and a graduate of Harvard Law School, Arum worked as a tax expert on Wall Street and a Justice Department attorney during the Kennedy and Johnson administrations. He got mixed up in the financial end of boxing in 1962 after Sonny Liston knocked out Floyd Patterson to win the heavyweight title. Arum headed a government task force that held up the proceeds while investigating one of the promoters, Roy Cohn.

Three years later, Arum became the lawyer for the man who beat Liston, Muhammad Ali. Arum promoted 26 of Ali’s bouts, making a fortune, and then made another in the 1980s from such great middleweights as Tommy Hearns, Sugar Ray Leonard, and Marvin Hagler. Throughout the next decade, while King and his crown jewel, Mike Tyson, presided over the heavyweight division, Arum guided the career of the young De La Hoya and turned him into a fistic Fort Knox.

With Arum pulling the strings, De La Hoya established his career by crushing a series of carefully picked patsies before knocking out super-featherweight Jimmy Bredahl for his first world title. He had been a pro for a little more than 18 months. From then on, De La Hoya made a minimum of $1 million a fight, an unprecedented sum for the lower-weight divisions, let alone for a fighter with only a dozen pro bouts.

De La Hoya was the boxer that the Hispanic community—and advertisers—had been waiting for. Spooked by Tyson’s cannibal mystique, Madison Avenue recoiled from virtually all prizefighters except De La Hoya. Radiating charisma, De La Hoya pitched everything from aftershave lotion to milk. His status as a Latin heartthrob was promoted by Arum, who planted women with marry me, oscar! signs in televised press conferences. In 1997, De La Hoya’s $37 million in earnings made him, according to Forbes, the third-best-paid athlete in the world.

By the end of the century, the freewheeling, free-spending De La Hoya was saddled with numerous lawsuits and burning through his money as fast as he made it. He squandered millions in casinos, sometimes losing as much as $300,000 in a single sitting. After one of De La Hoya’s fights in Las Vegas, Arum asked Caesars Palace to impose a $250,000-a-night credit limit on the fighter to ensure that he would leave town with most of his boxing winnings intact.

At the same time, the undefeated champion had begun to question the way his purses were being carved up. He says Arum explained very little about the intricacies of pay-per-view, closed-circuit broadcasts, and sponsorship percentages. He grew warier in September 1999 after a welterweight title bout with Felix “Tito” Trinidad of Puerto Rico. Arum and King, who represented Trinidad, had negotiated the fattest nonheavyweight deal ever. De La Hoya lost, in a split decision, his title and his temper: His take was $23 million; Arum’s, $12 million. “I thought, There’s something wrong here,” De La Hoya says.

He hired his own agent and accountant and set up Golden Boy Enterprises to oversee his fights and endorsements. In search of a banker to help him run the operation, he turned to Richard Schaefer, then the deputy C.E.O. of UBS’s private-banking operations in the U.S., who happens to be married to the aunt of De La Hoya’s closest childhood buddy. Schaefer, now 46, isn’t anyone’s idea of a boxing whiz kid. Born into a banking family in Bern, Switzerland, he’s a mild, sober fellow with an exceedingly limited understanding of the fight game. Yet since Schaefer joined the company, in 2001, Golden Boy has shown consistent double-digit growth. “As a business, the sport is a mismanaged asset that’s stuck in the 20th century,” he says. “To me, boxing was a stock out of favor. We had the chance to buy low and sell high.”

Schaefer, who says that his clients included “nearly half of the Forbes 400 west of the Mississippi,” persuaded De La Hoya to quit gambling and set about learning the vagaries of the sport. Apprenticing under Arum, he learned quickly. De La Hoya insisted that Schaefer be allowed to sit in on meetings, and Arum taught the banker how to run a boxing show, ferret out sources of revenue, and negotiate with venues, sponsors, and TV networks.

“I knew about integrity and transparency and how to deal fairly with people, all of which were new and unknown concepts to boxing,” Schaefer recalls. Eventually, he told Arum that De La Hoya wanted to dump him as a promoter and go it alone. “Bob didn’t believe me at first,” says Schaefer. “When he did believe me, he started screaming. You can’t blame him for wanting Oscar to remain his cash cow.” (Arum denies reacting this way.) De La Hoya sued to get out of his contract, but the Golden Boy’s victory in federal court, as well as his reputation, was tarnished by a boast that he had just “defeated one of the biggest Jews to come out of Harvard.”



Still, the company may not be as clean as its reputation. Last year, at a steak house in Beverly Hills, Schaefer and De La Hoya handed boxer Manny Pacquiao—Golden Boy’s opponent in the ring this month—a suitcase stuffed with $250,000 in cash to get him to sign a seven-fight contract. Though Schaefer and De La Hoya broke no laws, the hand­off of 12,500 twenty-dollar bills seemed like a move straight out of the Don King playbook. And as it turned out, Golden Boy was outbid. Arum later paid $1 million to Pacquiao and won a court battle for the right to promote him, and the cash was returned.

For his part, Schaefer has worked to bring corporate support back to the ring. “Luring sponsors wasn’t hard in Ali’s day,” he says. “But now sponsors have choices, and frankly they don’t need the negative perception that comes with boxing.” Yet he managed to persuade five Fortune 500 companies to sponsor the Mayweather fight in 2007 and publicize it at their retail stores. The cash and advertising by such formerly boxing-­unfriendly sponsors as Southwest Airlines, Tecate beer, and Bacardi-brand Cazadores tequila were valued at more than $10 million.

That kind of corporate approval, plus De La Hoya’s widespread appeal across many demographic groups, has helped push the company beyond boxing. Today, the promotion element is just one part of Golden Boy, which Schaefer likens to a “Hispanic Berkshire Hathaway.” Using De La Hoya’s celebrity and earnings (his worth is said to exceed a half-­billion dollars), the company has partnered with a Southern California developer to invest $100 million in commercial and residential properties in Hispanic communities. To date, they have signed off on eight projects in locations ranging from California to Texas and encompassing everything from low-income housing to big-box construction.

The company also owns, curiously enough, a small percentage of the company that makes Equal, the sugar substitute. And in February, Golden Boy bought a 25 percent interest in the Houston Dynamo, a Major League Soccer franchise, from the Anschutz Entertainment Group, which is run by billionaire Philip Anschutz. In a separate transaction, A.E.G., which owns 30 arenas across the country, purchased a minority interest in Golden Boy Promotions. The muscle and global reach of A.E.G. is expected to give Golden Boy a leg up in pursuing Olympic boxers who competed in this summer’s Beijing Games. A.E.G. has opened new stadiums in Beijing and London, and Schaefer envisions a pay-per-view simulcast featuring the first pro bouts of Olympic boxers on three continents.

Golden Boy’s most surprising investment is in the fast-fading world of print media. The Hispanic TV and radio markets have already been sliced up, but Spanish-language newspapers have operated as regional enterprises in a splintered trade. Golden Boy has a stake in ImpreMedia, publisher of the principal Hispanic newspapers in Los Angeles (La Opinión), Chicago (La Raza), New York (El Diario la Prensa and Hoy New York), and other major cities.

“Hispanics still read papers,” says Schaefer. Last year, one of Golden Boy’s subsidiaries purchased the Ring, the self-styled “bible of boxing,” along with three sister publications, for $7 million. De La Hoya promises to restore the ailing monthly to eminence by cross-promotion with some of the sponsors he has brought to the fight industry. And a boxing portal launched in collaboration with Yahoo will stream video of major bouts. He’s pledged to keep his hands off editorial content, and by all accounts, he has—at least so far.

“It’s a double standard,” protests King. “Had I bought the Ring, it would have been tantamount to treason.” In fact, in 1977 he did put out feelers. Alas, that same year, a magazine exposé revealed that the Ring’s ratings and its record book had been juggled to help King’s fighters in a nationally televised tournament. “I decided to just let it go,” he says with a sigh. “Why bring the condemnation of the nation upon myself?”

Other boxing promoters would be happy to see Golden Boy leave the ring for good. “They have no idea how to promote a fight,” says Arum. “One’s a banker, the other’s a boxer. No HBO executive in his right mind would agree to make Oscar a promotional partner.”

Kathy Duva of Main Events accuses Golden Boy of poaching other promoters’ fighters. “Oscar has had no success in building his own talent,” she says. “When Golden Boy hears that a young fighter’s contract is up, it moves in and pays a premium for his services.” King built his kingdom the same way, she says, “but he never talked about transparency.” Until recently, Duva managed a dozen fighters at a time. She’s now down to four. She says it takes an average of six years and $300,000 to build a fighter from scratch. “Those of us who have to make a living at promoting can’t anymore,” she says. “Golden Boy is trying to roll us up.”

Yet even the largely marginalized King claims to be a fan of De La Hoya’s. “Who am I to condemn, to vilify, to deprecate, to castigate?” he says. “I’m old and going on. Oscar is young and coming on. You can’t blame Golden Boy for amassing great promotional power in a time of boxing’s ‘niche-ization.’ Oscar didn’t create the situation; he just pounced on it. I applaud him for showing that fighters can think.” And Larkin, the former Showtime executive, argues that Golden Boy has endeared itself to HBO by “corporatizing” boxing promotion. “People like working with Golden Boy because they feel it’s clean,” he says. “It may or may not be—I don’t know—but that’s the perception. The company is reliable, realistic in its deal demands, and lives up to agreements. That’s saying an awful lot for a promoter.”

Schaefer adds, almost coyly, that jealousy is no more than feeling alone among smiling enemies. “When a Swiss banker and a kid from East L.A. appear out of nowhere to show people how things should be done, the crybabies attack them,” he says. “Which plays right into my cards. If the crybabies weren’t so obsessed with Golden Boy, they might actually pose a danger to me and Oscar.”

The question is, Will Golden Boy’s clout diminish once De La Hoya finally retires from fighting? “I’ll say this much,” says former H.B.O. exec Abraham. “It’s not going to increase.”

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